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ARTICLE · 04 MAY 2012

CMHC And Covered Bonds: Be Careful What You Wish For

Stikeman Elliott LLP
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On April 26, 2012, the federal government introduced the Jobs, Growth and Long-Term Prosperity Act, the legislation to implement the March 29, 2012 federal budget.

CanadaFinance and Banking
Douglas Klaassen
Douglas Klaassen
Mark McElheran
Mark McElheran
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On April 26, 2012, the federal government introduced the Jobs, Growth and Long-Term Prosperity Act, the legislation to implement the March 29, 2012 federal budget. Buried in this legislation (over 420 pages!) are significant changes to both the Canada Mortgage and Housing Corporation (CMHC) and the law in respect of Canadian covered bonds that will have direct and material effects on our mortgage and securitization markets. Industry participants who initially asked for covered bond legislation must surely be regretting it.

CMHC is now (finally) under adult supervision. As a federal Crown corporation with over $540 billion of outstanding guarantees on Canadian housing (an amount equal to the entire Canadian federal debt), CMHC will now report to the Office of the Superintendent of Financial Institutions, instead of the Minister responsible for Human Resources and Skills Development Canada (believe it or not!). With CMHC approaching its current statutory guarantee cap

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